CMA continues remedies pruning
The Competition and Markets Authority (CMA) is continuing its drive to ensure that its remedies do not stay in place longer than needed.
It is consulting on provisional advice to the Secretary of State for Business, Innovation and Skills that the remaining obligations in 7 structural merger remedies imposed under the Fair Trading Act 1973 (FTA) should be removed. It has also determined that 11 further FTA merger remedies have now lapsed. This is the first output of the ongoing review of 76 structural merger undertakings given by companies prior to 1 January 2005.
The CMA is also consulting on provisional decisions to remove 2 sets of monopoly remedies, specifically the Credit Cards (Merchant Acquisition) Order 1990 and undertakings given by Metal Box plc in 1972 (see notes for editors).
These provisional decisions – made by a group of 3 panel members, chaired by Simon Polito – form part of a programme of work, set out in the CMA’s annual plan 2015 to 2016 and likely to continue in subsequent years, which aims to reduce burdens on business by assessing whether past merger and market remedies have become unnecessary. As part of this programme, the CMA is also currently considering whether to carry out further reviews of 13 sets of monopoly remedies put in place by the CMA’s predecessors prior to 2005, and which have not been reviewed recently.
In addition, the CMA has today published updated guidance on the use of ‘sunset clauses’ in market investigations, following a consultation. Sunset clauses act as a time limit on new remedies created by the CMA by specifying a date or event after which they will no longer apply. Although the previous published guidance on market investigations made reference to sunset clauses, the CMA is now making a clearer commitment to considering the use of such time-limited remedies in future investigations, as well as providing guidance on how it will do so. The updated guidance also sets out the CMA’s approach to reviewing the continuing appropriateness of remedies in market investigations without sunset clauses, or where the sunset clause substantially exceeds 10 years.
Adam Land, the CMA’s Senior Director of Remedies, Business and Financial Analysis, said:
These provisional decisions are an important first step in our ambitious programme of work to review old remedies, getting rid of any that are no longer needed and fine-tuning those that need adjustment. In addition, our revised approach to sunset clauses shows our commitment to ensuring future remedies aren’t kept in place any longer than required.
Together this will help us target our monitoring and enforcement efforts on those remedies which still have a role to play in making markets work well for consumers and business, as well as reducing the administrative burden on the businesses affected.
Notes for editors
- The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.
- The CMA has a statutory duty under the Fair Trading Act 1973 and the Enterprise Act 2002 to keep under review undertakings and orders. From time to time, the CMA must consider whether, by reason of any change of circumstances: undertakings are no longer appropriate and need to be varied, superseded or released; or an order is no longer appropriate and needs to be varied or revoked. Responsibility for deciding on variation or termination of orders lies with the CMA except for a small number of older remedies where decisions are for the Secretary of State following advice from the CMA.
- The Metal Box undertakings were given on 22 February 1972 and amended on 16 October 1980 and 5 June 1992.
- Enquiries should be directed to Rory Taylor (firstname.lastname@example.org, 020 3738 6798)
- For more information on the CMA see our homepage or follow us on Twitter @CMAgovuk, Flickr and LinkedIn.